Growth in LNG purchases expected to quadruple

Fuel Fix:
The world's biggest buyers of liquefied natural gas will quadruple their uncontracted demand for LNG, and more buyers will be on the hunt for additional LNG soon, too, a report from Wood Mackenzie suggests.

That's good news for Texas, which is transforming into an LNG export hub as companies tap into cheap natural gas supplies.

By 2030, the seven major LNG buyers are expected to gobble up 80 million metric tons of liquefied natural gas over and above their existing contracts, according to Wood Mackenzie.

Total demand from those buyers, including purchasing LNG on contract and off contract, will grow to 180 million metric tons, up from 150 million metric tons today, the research firm said.

"As China pushes on toward a lower-emission economy, its demand for gas and LNG has grown significantly and we expect the trend to continue in the longer term," said Wood Mackenzie research director, Nicholas Browne in a statement.

The major seven LNG buyers are clustered in Asia, including China National Offshore Oil Corp., PetroChina, Sinopec, Tokyo Gas, Jera Co. and CPC Corp. Together they account for more than 50 percent of the global LNG market.
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A new report from the U.S. Energy Information Administration earlier this week said the U.S. could more than double its export capacity in the next year to become the third largest LNG exporter behind Australia and Qatar.

In Texas, Cheniere Energy sent out the first LNG export tanker from the state earlier this week. Cheniere's initial customers for the Corpus Christi facility hold long-term supply contracts from Europe, Asia and Australia.

Cheniere started exporting LNG from the U.S. in 2016, when it sent LNG from its Sabine Pass complex in Louisiana. Dominion Energy of Richmond, Va., also is exporting LNG from the United States, and others are expected to follow in the coming months, including two Houston firms, Kinder Morgan, which is completing an export terminal in Georgia, and Freeport LNG, which will operate a Gulf Coast terminal at Quintana Island.

Companies behind another four export projects on the Gulf Coast —Magnolia LNG, Delfin LNG, Lake Charles and Golden Pass— have federal approvals and are expected to make final investment decisions in the coming months, according to the Energy Information Administration.

Several other companies, including Sempra Energy of San Diego, NextDecade of Houston and Tellurian of Houston, are working on projects expected to start up in the coming years. This week NextDecade scored state permits for its Rio Grande LNG project in Brownsville. And the federal government just released an environmental study on another Brownsville project, Annova LNG, an important milestone in the permitting process.
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I think Europe will be a growing market for US LNG shipments.  Russia has sometimes used its supply of natural gas for political purposes and many, in Eastern US see it as an unreliable supplier.  Belarus can probably be added to a growing list of unhappy customers.  The US has agreed to supply Poland and is pushing Germany to accept US LNG shipments.

The first shipment from an LNG export terminal in Corpus Christi left the port in recent days.  When pipelines from the Permian Basin are finished in the coming months the Corpus Christi facility and the proposed facilities in Brownsville will see their export business grow dramatically.

It has not been that long ago when Democrats in Congress were trying to squelch the LNG export business.  There is still a segment of the anti-energy left that wants to "keep it in the ground."  That is something to be wary of as Democrats take control of the House.

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